This chapter examines the financing architecture underpinning Ukraine’s infrastructure sector and highlights the central role of public and donor resources in the current reconstruction phase. The analysis shows that investment activity remains dominated by publicly backed structures reflecting the limited maturity of the domestic financial sector and constrained private‑sector appetite under elevated risk. The chapter argues that Ukraine must strengthen its financial intermediation system so that longer-term private financing can gradually complement public and donor support. It also highlights the need to scale up de‑risking instruments selectively to crowd in private capital without compromising fiscal sustainability.
Infrastructure Policy Review of Ukraine
Abstract
Ukraine will need to actively pursue large‑scale infrastructure investments to accelerate its recovery and support its national economic growth and sustainable development objectives. Mobilising private capital will be critical to rebuild infrastructure that has been destroyed or damaged during the war while supporting greenfield investments that modernise Ukraine’s transport network, boost connectivity with the European Union and promote long-term resilience.
Investment in Ukraine’s transport infrastructure has been in large part led by the public sector, with support from multilateral development banks (MDBs). Yet, Russia’s full-scale invasion has created additional pressures on public budgets as well as on earmarked funds that were supporting investments in Ukraine’s transport networks. Despite the priority that has been given to the transport sector in Ukraine’s 2025 budget allocations and the support that is being provided by international partners, private capital will need to be mobilised to address financing needs.
Attracting greater private sector participation will require strengthening the banking sector so greater financial intermediation for infrastructure can take place in Ukraine. Pursuing reforms to develop Ukraine’s capital markets will be critical to diversify the investor base and explore approaches that can monetise the country’s brownfield assets. Risk mitigation instruments will likewise be key to address war-related risks that are hindering investments and ease investor concerns around potential credit risks in the aftermath of the war.
These measures will be critical to support private investment in Ukraine’s transport sector but remain relevant for other sectors as well, given the limited extent of private participation in Ukraine’s infrastructure.
Strengthening Ukraine’s policy frameworks to facilitate the mobilisation of private capital will be an important component for recovery, to ensure prudent use of limited resources (Bilotkach and Ivaldi, 2022[1]). It is estimated that around 40% of Ukraine’s reconstruction and recovery could be covered through private investment (domestic and foreign), provided that enabling reforms and measures are adopted to facilitate private participation (World Bank, Government of Ukraine, European Union, United Nations, 2026[2]).
Previous analysis of private participation in infrastructure for countries emerging from conflict reveals that investors typically resume engagement six to seven years after the conflict ends (Schwartz, 2014[3]; Araya, Schwartz and Andres, 2013[4]). However, Ukraine has already been able to bring forward investment projects with private participation since the war started (see Table 6.1). Projects that have private sector participation, often have a key Ukrainian party involved. This may be an important requirement to ensure that projects can be pursued with the private sector.
Source: IJ Global Database; Ministry of Economy of Ukraine & Kyiv School of Economics (2024[5]), Ukraine Investment Guide, 66673120c02fe81b61d75096_Ukraine Investment Guide 2024 (2)_compressed.pdf.
Public sector finance – referring to transactions that involve either equity from the public sector or debt solely from Development Finance Institutions (DFIs) – represented the main source of finance from 2021 to the end of 2024. During the first half of 2025, Ukraine registered an increase in the value of transactions reaching USD 1.3 billion (see Figure 6.1). The total annual value of infrastructure transactions in Ukraine in 2023 and 2024 remained close to USD 800 million, predominantly financed through MDB debt financing and grants from the European Union. More than 80% of those transactions took place in the road and rail subsectors. This highlights the continued dominance of publicly backed financing structures and the limited scale of private investment.
Investments in the road and rail subsectors have been largely funded through state budget resources, dedicated sub-sectoral funds such as the Ukraine State Road Fund – which has been repurposed to serve the state budget for its wartime response – and debt financing from MDBs. Private investment has concentrated in ports and airports, where foreign investment is generally easier to attract given the capacity of seaports and airports to generate revenue in freely usable currency.
Note: Combines all Project Finance, Corporate Finance (excluding company acquisitions) and Public Sector Finance transactions. However, it excludes direct public- or taxpayer-funded infrastructure development. Transactions included have all reached financial close.
Source: IJ Global Database.
In Ukraine’s 2025 budget, UAH 224 billion (USD 5.4 billion) was allocated to 93 projects (Ministry of Finance of Ukraine, 2024[6]; Ministry of Finance of Ukraine, 2025[7]), with healthcare, transport and energy sectors having the largest number of projects (see Figure 6.2, Panel A) and the transport and energy sectors receiving around 65% of the budgetary allocation, predominantly through state guarantees for loans provided by multilateral and bilateral partners (see Figure 6.2, Panel B).
Note: In Panel B, state guarantees are those provided to loans from multilateral and bilateral partners. Bilateral and multilateral support includes both loans and grants.
Source: Ministry of Finance of Ukraine (2026[8]), https://mof.gov.ua/en/derzhavnij-borg-ta-garantovanij-derzhavju-borg.
The broadness and depth of the financial sector has a direct relationship with the types of financing available, the robustness of the regulatory regime, protections to investors and availability of professional services that can support a variety of financing sources. Having a strong, competitive and well capitalised banking sector lends itself to having financial intermediation that can support complex and long-term financing. A strong capital market allows diversification of financing through access to a broad range of investors, as well as a wide range of instruments that are available both in the market as well as in a structured manner.
Having the backbone of an active and stable banking sector and/or capital market serves infrastructure financing by providing choices on the types of financing that is available, for both the government, as well as financial institutions and investors. This is particularly important when a government wants to mobilise private capital to infrastructure, as it will allow more diverse parties with different risk tolerance to take part. It also serves to diversify investors’ choices.
In addition, institutional investors and savings provide a potential source of infrastructure financing, that could serve as domestic private capital mobilisation, if the regulatory regime can be aligned and financial instruments that create infrastructure as an asset class are available.
Liquid and robust financial markets will also provide opportunities for innovative financing approaches such as asset securitisation and risk mitigation measures to be deployed. This will facilitate risk management of projects and take advantage of the value of existing assets.
6.2.1. Banking sector
Bank’s assets represent around half of Ukraine’s GDP, a share that is below the ratios in peer countries (see Figure 6.3, Panel A). Domestic government bonds constitute around 27% of bank assets, as banks have absorbed a large part of government debt since the full-scale invasion (OECD, 2026[9]). Lending activity remains below peers, with domestic bank credit to the private sector totalling 18% of GDP in 2023 (see Figure 6.3, Panel B). The four main state‑owned banks (SOBs) hold around half of all net assets and more than 60% of retail deposits, shares which have remained practically unchanged since 2016 (see Figure 6.4). These banks also have higher non-performing loan (NPL) ratios (43%) compared to Ukrainian private banks (12.6%) or foreign-owned banks (10.9%) (OECD, 2025[10]).
Source: OECD (2025[10]), OECD Economic Survey of Ukraine, https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/05/oecd-economic-surveys-ukraine-2025_0bb82ef9/940cee85-en.pdf.
Source: National Bank of Ukraine. (2024[11]), Banking Sector Review https://bank.gov.ua/admin_uploads/article/Banking_Sector_Review_2025-11_eng.pdf?v=17.
In June 2024, Ukrainian authorities approved a national lending development strategy that seeks to support credit growth to help priority sectors such as defence and energy, through subsidised lending, loan guarantees and war risk insurance (International Monetary Fund, 2024[12]). Improved macroeconomic conditions are also leading to growth in lending with better loan rates and longer maturities (National Bank of Ukraine, 2024[13]). Recent data show that net local currency loans to businesses and households have been growing steadily since mid-2023, with longer maturity loans outpacing the growth of short-term loans in the second quarter of 2025 (National Bank of Ukraine, 2025[14]). Loan portfolio quality is also improving, with non-performing loan (NPL) ratios falling across all groups of banks and reaching pre‑war levels. Such improvements in the overall performance of the banking sector could contribute to facilitate debt financing for infrastructure.
The new Strategy of Ukrainian Financial Sector Development outlines Ukraine’s commitment to gradually unwind measures that temporarily suspended financial sector reforms taken to align with the EU acquis which had been adopted prior to Russia’s full-scale invasion (De Haas and Pivovarsky, 2022[15]). These included establishing a flexible exchange rate and implementing an inflation targeting regime. Ukraine is taking measures to ease foreign exchange controls which impact cross-border lending. Capital controls are being gradually eased: since May 2025, businesses are allowed to conduct cross-border transfers of funds from Ukraine for individual transactions within an established limit equal to the amount of foreign investor funds that they have attracted (National Bank of Ukraine, 2025[16]).
Other financial market reforms include reestablishment of stress testing and gradually reducing state ownership of the banking sector, including through full or partial privatisations which could enhance efficiency and competition in the sector, generate revenues for the state and, if SOB listings are considered, contribute to capital market development (Government of Ukraine, 2024[17]; OECD, 2026[9]).
For project financing opportunities to take place, Ukraine’s larger domestic banks will have to improve their credit rating and ensure that capital adequacy ratios remain stable. Even if state‑owned banks are playing an important role during wartime by supporting defence sector financing and executing government programmes, they can also reduce fiscal discipline and crowd out credit to the private sector (OECD, 2026[9]).
As noted in the Strategic Principles for Reforming the State‑owned Banking Sector, addressing the corporate governance of SOBs is a critical step to support better financial intermediation in Ukraine. Ensuring management of SOBs is arms’ length from the government will also allow credit decisions to be divorced from political considerations. Better governance of SOBs could also lead to a larger role in project financing of infrastructure projects with international partners in the future.
Greater involvement of international banks in project financing will likewise be necessary to bring competition and project financing skills that domestic banks currently lack. Implementing the new Strategy of Ukrainian Financial Sector Development will be important to ensure financial market development in line with the EU acqui. This could lead to better integration into the EU market and the improve the ability of EU financial institutions to operate in Ukraine in the future. Loan syndications between domestic and international banks could also support the development of project finance skills for the domestic banking sector.
Since engagement of international banks often happens in response to requests from international developers who are their clients, ongoing reforms to strengthen Ukraine’s PPP framework should also focus on attracting high-quality international project sponsors. While capital controls in the current climate are imperative, commitment to unwind them will be critical if Ukraine wants to attract private investors to large‑scale infrastructure projects.
6.2.2. Capital markets
Capital markets in Ukraine remain underdeveloped and currently offer limited possibilities to finance infrastructure. Market capitalisation of securities stood at 5% of GDP in 2021 and further decreased following Russia’s full-scale invasion (De Haas and Pivovarsky, 2022[15]). Since 2022, trading activities have halted for all products, except government bonds which can be accessed by both domestic and foreign investors (OECD, 2025[10]).
The National Bank of Ukraine (NBU) and the National Securities and Stock Market Commission (NSSMC) have put forward a series of strategic objectives focussed on developing Ukraine’s capital market (International Monetary Fund, 2024[18]). Initiatives are underway to strengthen the NSSMC’s institutional capacity and independence, as well as to develop an integrated stock exchange structure (OECD, 2026[9]). Another key measure is to facilitate direct foreign investor access to a wider range of debt instruments beyond government securities (International Monetary Fund, 2024[12]). In July 2024, the NBU amended its regulation and provided a legal basis allowing it to open and service a securities account of a nominee holder for an international central securities depositor. Such measures can support access to foreign capital through financial instruments issued for Ukraine’s reconstruction, including municipal bonds and other reconstruction-related debt instruments (National Bank of Ukraine, 2024[11]).
The Law On Amendments to Certain Legislative Acts of Ukraine on Simplification of Investment Attraction and Introduction of New Financial Instruments adopted in 2020 aimed at improving the efficiency and functionality of capital markets in Ukraine by strengthening investor protection, transparency and diversity of financial products. The law introduced new types of securities, which included infrastructure and green bonds. Proceeds from infrastructure bonds are expected to be used exclusively to finance or refinance the construction or reconstruction of infrastructure facilities or to implement an infrastructure project or one of its specific stages. The definition of infrastructure projects is broad and includes facilities in the area of transport infrastructure (roads, bridges, crossings, etc.), gas pipelines, social and cultural facilities, housing and communal services (water supply and sewerage facilities, heat and energy supply systems, etc.). For green bonds, the NSSMC issued Methodological Guidelines on the classification and use of green bond proceeds in line with the NextGenerationEU green bond framework and International Capital Markets Association (ICMA) Green Bond Principles. Such measures supported issuance of green eurobonds by Ukrenergo and DTEK in 2021. However, following Russia’s full-scale invasion, Ukrenergo’s green bonds have been undergoing restructuring after suspension of payments in 2022, while DTEK’s were restructured in 2024 to extend their maturity by three years.
In 2023 the NSSMC approved the Concept for the introduction of the legislative framework for covered bonds and securitisation in Ukraine, which underlined the need to amend the capital markets law and adopt a dedicated law on securitisation receivables (NSSMC, 2023[19]). The Concept noted the potential of this mechanism to finance the reconstruction of Ukraine’s infrastructure. Since securities are assessed based on the securitised future cash flows of the asset and not on the creditworthiness of the originator, securities issued may obtain higher credit ratings than those of the originator (for instance the Ukrainian sovereign or a Ukrainian SOE). This is particularly relevant in the Ukrainian context given challenges related to sovereign and sub-sovereign credit ratings, which remain far below investment grade. Development of a dedicated regulatory framework should provide clarity on the types of assets eligible for securitisation, the procedure to obtain regulatory approval and the obligations of all parties involved. Cash flows needed to cover maintenance costs should be considered when defining eligible assets, in order to avoid diverting resources from necessary maintenance expenditures. This framework should also establish certainty for investors around the accounting and taxation arrangements associated with these investments.
Ukraine needs to continue its work on the development of its capital market, to enable diversification of its financial intermediation base, and make different financing approaches available for the wider economy as well as infrastructure projects.
The measures adopted by NBU and NSSMC to enable foreign investor access to its debt market beyond government securities are heading in the right direction. Lifting foreign exchange controls as soon as macroeconomic conditions allow will be key to strengthen demand for such instruments and facilitate greater inflows of foreign investment.
Thematic bonds such as infrastructure and green bonds also offer potential to attract a broader range of investors. Once conditions allow, Ukraine should assess the convenience of infrastructure and green bond issuances.
Given the difficulties to finance infrastructure in Ukraine, securitisation of brownfield assets may provide an avenue for monetisation. The Concept note by NSSMC on securitisation should be examined closely so that a robust regulatory framework can be developed.
6.2.3. Risk mitigation tools
There is growing recognition of the role that risk mitigation instruments can play in mobilising private capital, either by lowering exposure to risk, reducing the severity of losses, reducing uncertainty, or increasing returns. Governments, multilateral development banks, national development banks, export credit agencies, public infrastructure funds, and the private sector offer a variety of risk mitigation instruments that allow projects to move forward and enhance their bankability. This is especially important for emerging and developing countries as they seek to address the shortage of bankable projects, which hinders private sector involvement. In Ukraine, the case for such instruments is particularly strong given elevated war-related and sovereign risks and remaining constraints on long-tenor domestic financing.
Risk mitigation instruments can contribute to the mobilisation of private capital by better managing risks in infrastructure projects (see Box 6.1). In the Ukrainian context, guarantees that address political risks and in particular war risk, will be critical to mobilise private investment towards infrastructure (see Box 6.2).
The OECD has defined “risk” as the measurable probability that an actual outcome will deviate from an expected outcome and has identified examples of key risks that may materialise throughout the different phases of infrastructure project development (see Table 6.2). These can be broken down into three categories:
1. Political and regulatory risks arise from governmental actions, including changes in policies or regulations that adversely impact infrastructure investments, and can be highly subjective, therefore difficult to price into infrastructure finance.
2. Macroeconomic and business risks arise from the variation embedded in an industry and/or economic environment. These risks may result from fluctuations in macroeconomic variables such as inflation, real interest rates, and exchange rates, as well as from business cycle factors that may affect the demand for services linked to an infrastructure asset or debt maturity issues, which may raise financial risks.
3. Technical risks are determined by the skill of the operators and managers as well as factors related to the peculiarities of a project, project complexity, construction, and technology.
Source: Adapted from OECD (2015[20]), Infrastructure Financing Instruments and Incentives, https://c40.my.salesforce.com/sfc/p/#36000001Enhz/a/1Q000000MfEM/sRCHSACfaQlPWYcVmdu9_77NGXaicf1GDemsHXUUse0.
The importance of political risk insurance is illustrated by its significant growth in Ukraine since the beginning of Russia’s full-scale invasion. From 2022 to 2024, export credit agencies and MIGA provided almost USD 3.3 billion of political risk insurance, which represents more than five times their pre‑2022 amount (see Figure 6.5) (MIGA, 2024[21]). Export credit agency (ECA) provision has been critical to this increase, which has evolved from USD 210 million in 2022 to USD 2.6 billion in 2024. The energy sector provides examples of how PRI has worked to mobilise private capital even during wartime (see Box 6.3).
Note: Sectors covered include energy, infrastructure, manufacturing, natural resources, renewable energy, transportation and other.
Source: Berne Union PRI Database.
While Ukraine’s current guarantee needs are mostly for political risk, it should consider how commercial risk will be covered as it tries to tap into private financing.
Source: OECD (2025[22]), G20/OECD Report on Blended Finance Derisking Measures, https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/10/g20-oecd-report-on-blended-finance-derisking-measures_29d012d0/9df5fe74-en.pdf
Tyligulska Wind Farm Phase 2
In January 2025, DTEK, one of Ukraine’s largest private energy companies, unveiled plans for a EUR 450 million expansion of the Tyligulska Wind Power Plant on the Black Sea coast, after reaching a financing agreement with lenders to purchase 64 wind turbines from Vestas. The project constitutes the largest private sector investment in Ukraine since Russia’s full-scale invasion in 2022 and, once completed, will be the largest onshore wind farm in Central and Eastern Europe.
The project is being brought forward through a project finance scheme involving a EUR 80 million equity investment from DTEK and EUR 370 million of a commercial syndicated loan in which Danske Bank served as mandated lead arranger. The Export and Investment Fund of Denmark (EIFO) will provide USD 419 million in guarantees for Danske Bank. The bulk of the loans will be deployed to purchase turbines.
GNG Wind Volyn Project
The GNG Wind Volyn Project involves the development of a 147 MW greenfield onshore wind farm with a total cost of EUR 224 million that will contribute to Ukraine’s energy resilience. The project is undertaken by Wind Power GSI Volyn LLC and Wind Power GSI Volyn 3 LLC – special purpose vehicles incorporated in Ukraine – and will sell its generation under a corporate power purchase agreement. The IFC has provided upstream support to the project on key bankability considerations, particularly in relation to electricity market analysis and offtake arrangements.
The project benefits from a EUR 60 million senior concessional loan provided by IFC, EBRD and the Black Sea Trade and Development Bank (BSTDB) that has received a partial risk guarantee from the EU’s Ukraine Investment Framework Hi-Bar Programme. The level of concessionality (i.e. “subsidy”) provided by the loan is estimated to be 12% of total project costs.
Environmental and Social Impact Assessments were conducted in accordance with IFC’s, EBRD’s and BSTDB’s respective environmental and social safeguard frameworks, which all assigned a B category to the project. An Environmental and Social Due Diligence Assessment was undertaken jointly by the IFC, EBRD and BSTDB through an independent internal consultant as well as with Ukraine’s Environmental Impact Assessment.
Source: DTEK (2025[23]), DTEK to invest EUR 450 million to expand Tyligulska windfarm in largest investment since war in Ukraine began, https://dtek.com/en/media-center/news/dtek-invest-450-million-tyligulska-windfarm-expansion/; IJ Global Database; EBRD (2024[24]), Galnaftogaz Wind Project, https://www.ebrd.com/home/what-we-do/projects.html; IFC (2024[25]), Project Information and Data Portal – GNG Wind Volyn, https://disclosures.ifc.org/project-detail/SII/48387/fcs-re-gng-wind-volyn.
Although risk mitigation is often only thought of as an instrument (e.g. guarantees, insurance products) it can also take the form of institutional and regulatory frameworks that reduce risks throughout a project’s lifecycle. Regarding infrastructure projects, efficient pricing mechanisms, transparent cost-benefit analysis, and rigorous project appraisals can support informed decision making and efficient implementation. Life‑cycle cost assessments and strategies like open access to essential infrastructure and limited downstream renegotiations in joint arrangements like PPPs can contribute to the long-term sustainability and value for money in infrastructure investments (see Box 6.4).
To ensure economic efficiency, infrastructure investments must provide value for money, accounting for both positive and negative externalities. A stable legal and regulatory framework is essential to minimise risks and support sound investment decisions. Additionally, appropriate pricing mechanisms can encourage efficient use and determine optimal provision levels. Rigorous project appraisals, focussing on economic efficiency and sustainability, should guide project selection, while strategies to mitigate delays and cost overruns are crucial. Competitive procurement processes and consideration of life cycle costs ensure optimal quality and cost. Finally, effective maintenance and monitoring during the operational phase, including the use of innovative technologies, are essential to preserve asset quality and avoid costly rehabilitation.
The OECD Compendium of Policy Good Practices for Quality Infrastructure Investment outlines several good practices and auxiliary measures that correspond to creating a strong policy and institutional environment, project development, and project implementation. In ensuring economic efficiency of infrastructure projects and minimising associated risks in project development, the compendium lists the following good practices:
1. Competitive business environment: Promoting a competitive business environment and a level-playing field to foster cost effective infrastructure through subjecting activities to appropriate commercial pressures, dismantling unnecessary barriers to entry, and implementing and enforcing adequate competition laws.
2. Carefully considering, when appropriate, private sector participation in infrastructure provision.
3. Open access to essential network facilities: Guaranteeing access to essential network facilities to all market entrants on a transparent and non-discriminatory basis.
4. Sustainable pricing mechanisms: As relevant, using appropriate and flexible pricing for infrastructure services (e.g. user charges, congestion prices) to encourage more efficient use of infrastructure and to help decide on appropriate levels of infrastructure provision.
5. Rigorous project appraisal and selection, based on cost-benefit analysis: Investing in rigorous project appraisal and selection processes that privilege socio-economic efficiency (taking into account economic, social, fiscal and environmental costs and benefits including externalities) and consider not only initial costs, but the full life cycle costs of projects (planning, design, finance, construction, operation and maintenance (O&M), and possible disposal).
6. Value for money assessment: Carefully evaluating different procurement modes on the basis of value for money with respect to life cycle costs.
7. Competitive tendering process focussed on defined measurable outcomes: Using competitive tendering, maximising participation of all qualified suppliers, and limiting the use of exceptions and single‑source procurement.
8. Efficient and transparent risk allocation: Ensuring a transparent and appropriate allocation of risks in the structuring of projects.
9. Effective monitoring and management of assets: Optimising life cycle costs and asset quality through ensuring effective monitoring, operation and maintenance.
10. Re‑negotiations: Limiting recourse to re‑negotiations in public-private partnerships, and if unavoidable, establishing predictable frameworks and strategies for handling them.
Source: OECD (2020[26]), G20/OECD Report on the Collaboration with Institutional Investors and Asset Managers on Infrastructure, https://web-archive.oecd.org/pdfViewer?path=/2020-07-24/560068-Collaboration-with-Institutional-Investors-and-Asset-Managers-on-Infrastructure.pdf.
Ukrainian authorities have taken steps to support the provision of risk mitigation applicable to investments in transport infrastructure and other sectors. In November 2023, Ukraine amended its Law on Financial Mechanisms for Stimulating Export Activities and gave its export credit agency the possibility to provide war risk insurance to both domestic and foreign investors. As a result of these changes, Ukraine’s ECA can provide investment loan insurance to Ukrainian banks and insurance for investments in Ukraine to individual or legal entities that are residents or non-residents in Ukraine (see Table 6.4).
As of July 2025, the investment loan insurance product supported three projects and the insurance of investments product has supported none, compared with the more than 100 contracts for the export loan insurance product offered by the ECA. One key barrier results from the cover limit of USD 10 million, which excludes large capital investments in infrastructure. Given the limited availability and pricing of reinsurance options, an increase in the economic capital of Ukraine’s ECA could expand its capacity.
Source: Ukraine’s Export Credit Agency.
The Ukraine War Risk Insurance Facility constitutes another domestic effort aimed at scaling up war risk insurance. The Facility was launched in 2025 with the support of Lloyd’s of London to provide war risk coverage for commercial properties and investments in Ukraine. The scheme combines insurance from Ukrainian insurer ARX with reinsurance from Lloyd’s for 100% of risk in excess of ARX’s retention (see Table 6.5) (McGill and Partners, FortuneGuard, ARX, 2025[27]). The facility provides coverage of up to USD 50 million (and in some cases higher) to high-value infrastructure assets, new construction projects and equity investments. UkraineInvest has signed a Memorandum of Co‑operation with ARX to promote the scheme with potential investors (UkraineInvest, 2025[28]).
Source: American Chamber of Commerce Ukraine (2024[29]), Ukraine Wary Risk Insurance Facitlity, https://chamber.ua/wp-content/uploads/2025/01/Ukraine-War-Risk-Insurance-Facility.pdf.
Initiatives such as the war risk insurance facility hold promise as they can help overcome the challenges of underdeveloped domestic insurance markets with limited international reinsurance options. Ukraine should continue to work closely with its international partners to establish facilities that can provide mitigation instruments to support private investment into the economy. Ensuring transparency of eligibility criteria, exclusions and claims processes will be important to build market confidence in these facilities.
Ukraine’s ECA has made much effort to provide war risk insurance. However, its capacity is limited and its products limited to USD10 million coverage. Consideration could therefore be given to increasing the economic capital of Ukraine’s ECA to enable an expansion in its cover limit.
International donor support will continue to be critical to scale up the provision of guarantees in Ukraine and attract greater levels of private investment. Various international initiatives that are seeking to scale up the provision of political risk guarantees are ongoing.
6.3.1. MIGA Support for Ukraine’s Reconstruction and Economy (SURE) Trust Fund
In 2023, MIGA set up the Support for Ukraine’s Reconstruction and Economy (SURE) Trust Fund, which was established with Japan as anchor donor, and has a target size of up to USD 300 million of donor contributions to enable MIGA guarantee issuance in Ukraine. Donor financing through the SURE Trust Fund is combined with MIGA risk exposure on its own books, and crowds in public and private reinsurance where available, to deploy guarantees. Given that private sector reinsurance capacity is currently unavailable in Ukraine, MIGA’s focus has so far been on public sector reinsurance of its guarantees through DFIs and ECAs (Multilateral Investment Guarantee Agency, 2024[30]).
Expansion of political risk insurance to international lenders and sponsors for reconstruction in critical sectors such as transport, housing and energy through the SURE Trust Fund is only expected after the war ends (Multilateral Investment Guarantee Agency, 2023[31]). G7 Finance Ministers and Central Bank Governors have committed to work with Ukrainian authorities, international financial institutions and the insurance industry to scale up reinsurance options for Ukraine (G7 Canadian Presidency, 2025[32]).
6.3.2. EU’s Ukraine Investment Framework (UIF)
The EU’s Ukraine Facility is constituted by three pillars and aims at strengthening Ukraine’s access to financing for recovery. The Facility envisages the allocation of EUR 50 billion of EU financial assistance to Ukraine during the period of 2024-2027. The first pillar focusses on supporting the implementation of the Ukraine Plan by providing EUR 38 billion as direct support to the state budget through EUR 5 billion in grants and EUR 33 billion in loans. Pillar 2 consists of the Ukraine Investment Framework (UIF) which leverages EUR 9.3 billion in loan guarantees (EUR 7.8 billion) and blended finance grants (EUR 1.5 billion) to de‑risk investments and mobilise up to EUR 40 billion public and private investments in priority sectors such as infrastructure, in particular those that have been included in Ukraine’s single project pipeline (see section 5.3). This pillar is being implemented by EBRD, EIB, IFC, Council of Europe Development Bank (CEB) and bilateral financial institutions such as EU member states’ NDBs and ECAs. The third pillar targets technical assistance and support amounting to EUR 5 billion to facilitate Ukraine’s alignment with EU laws and regulations (European Commission, 2024[33]).
The UIF is the most relevant EU initiative when it comes to the mobilisation of private finance for Ukraine’s reconstruction. The UIF’s is governed by the Ukraine Investment Framework Steering Board, a special body that provides strategic and operational management and approves the transactions under the UIF (European Commission, 2025[34]). The Steering Board includes representatives of the European Commission and each EU member state, as well as members of the Verkhovna Rada of Ukraine, the Government of Ukraine and the European Parliament as observers. The UIF may involve the use of a variety of mechanisms including: loans (in freely usable and local currency); guarantees, counter-guarantees; capital market instruments; insurance; and equity or quasi‑equity.
As of June 2025, the EU has committed EUR 5.7 billion in guarantees and grant agreements to leverage EUR 18 billion in investments. The EU has signed agreements to provide a EUR 175 million guarantee and EUR 9.3 million in blended finance grants to support lending from the Polish Development Bank (BGK) to Polish investors in Ukraine (European Commission, 2025[35]). UIF guarantees have also supported EUR 50 million of EIB loans to Ukrainian Railways for the upgrade of key rail border crossing points with Poland, the Slovak Republic, Hungary and Romania that facilitate cross-border connectivity and trade. Even though 60% of the UIF has been allocated, disbursements and due diligence processes have reportedly been slow and will need to be accelerated to support project implementation at scale (Lausberg, 2025[36]).
6.3.3. EBRD’s Ukraine Recovery and Reconstruction Guarantee Facility (URGF)
In late 2024, the EBRD launched the Ukraine Recovery and Reconstruction Guarantee Facility (URGF) with the aim of launching the war risk insurance market in Ukraine (EBRD, 2024[37]). The Facility involves the provision of a guarantee of up to EUR 100 million to URGF IC Limited – a limited liability company based in Guernsey – that will use the EBRD guarantee to provide reinsurance cover for war-related losses and damages in Ukraine. By providing reinsurance that transfers risk outside of Ukraine, the Facility aims supports local Ukrainian insurers to scale up their underwriting capacity.
By March 2025, the Facility allowed international reinsurer MS Amlin to support three Ukrainian insurers in the expansion of their war insurance offerings. This scheme led to the provision of EUR 5 million in reinsurance cover within a few weeks, showing strong demand for war risk insurance (European Bank for Reconstruction and Development, 2025[38]). Further engagement of international reinsurers will be critical to support the development of the war risk insurance market in Ukraine, gradually contributing to increase loss limits and enabling scaled up coverage of infrastructure transactions.
Build project-finance capability in the domestic banking sector through syndications with international banks. For project financing opportunities to take place, Ukraine’s larger domestic banks will have to improve their credit rating and ensure that capital adequacy ratios remain stable. Greater involvement of international banks in project financing will also be necessary to bring competition and project financing skills that domestic banks currently lack. Loan syndications between domestic and international banks could also support the development of project finance skills for the domestic banking sector. Since engagement of international banks often happens in response to requests from international developers who are their clients, ongoing reforms to strengthen Ukraine’s PPP framework should also focus on attracting high-quality international project sponsors.
Strengthen state‑owned bank governance to reduce non-performing loans, minimise crowding-out of private credit and improve their capacity to provide market-based long-term financing. As noted in the Strategic Principles for Reforming the State‑owned Banking Sector, addressing the corporate governance of SOBs is a critical step to support better financial intermediation in Ukraine. Better governance of SOBs could also lead to a larger role in project financing of infrastructure projects with international partners in the future.
Advance capital market reforms to diversify the investor base, reopen bond issuance channels once conditions allow and enable longer-term financing tools, including infrastructure and green bonds. Measures adopted by the NBU to start servicing foreign banks are heading in the right direction and should be pursued in order to support access to foreign capital through financial instruments issued for Ukraine’s reconstruction and accelerate integration with the EU Single Market. Once conditions allow, Ukraine should assess the convenience of infrastructure and green bond issuances, which offer potential to attract a broader range of investors.
Create a clear asset-backed securitisation framework to leverage Ukraine’s existing asset base to support new investments. Given the difficulties to finance infrastructure in Ukraine, securitisation of brownfield assets may provide an avenue for monetisation, which could be further supported through the expansion of pension fund and insurance sectors. The Concept note by NSSMC on securitisation should be examined closely so that a robust regulatory framework can be developed. Such framework should provide clarity on the types of assets eligible for securitisation, the procedure to obtain regulatory approval and the obligations of all parties involved. This framework should also establish certainty for investors around the accounting and taxation arrangements associated with these investments.
Scale up provision of war risk insurance through increases to the Ukrainian ECA’s economic capital and partnerships with foreign ECAs, MDBs and other international partners. Ukraine’s ECA has made much effort to provide war risk insurance. However, its capacity is limited and its products limited to USD10 million coverage. Ukraine may wish to tap into more comprehensive coverage through joint coverage using different instruments. This may overcome some of the capacity limits it has. Consideration could also be given to increasing the economic capital of Ukraine’s ECA to enable an expansion in its cover limit. The Ukraine War Risk Insurance Facility constitutes a domestic effort that holds promise to scale up war risk insurance that supports investments in infrastructure. Ukraine should continue to work closely with its international partners to establish facilities that can provide mitigation instruments to support private investment into the economy.
References
[29] American Chamber of Commerce Ukraine (2024), AmCham/Citi Survey - Ukraine Wartime Business Assessment.
[4] Araya, G., J. Schwartz and L. Andres (2013), The Effects of Country Risk and Conflict on Infrastructure PPPs, The World Bank, https://ppi.worldbank.org/content/dam/PPI/resources/ppi_publication/web_publication/WPS6569.pdf.
[1] Bilotkach, V. and M. Ivaldi (2022), Rebuilding Ukrainian Transport Infrastructure.
[36] Centre, E. (ed.) (2025), Beyond the Ukraine Facility: De-risking private investment to reconstruct Ukraine and strengthen Europe, https://www.epc.eu/publication/beyond-the-ukraine-facility-de-risking-private-investment-to-reconstruct-ukraine-and-strengthen-europe/.
[15] De Haas, R. and A. Pivovarsky (2022), The reconstruction and development of Ukraine’s financial sector after the war, CEPR Press.
[23] DTEK (2025), DTEK to invest €450 million to expand Tyligulska windfarm in largest investment since war in Ukraine began, https://dtek.com/en/media-center/news/dtek-invest-450-million-tyligulska-windfarm-expansion/.
[24] EBRD (2024), Galnaftogaz Wind Project, https://www.ebrd.com/home/what-we-do/projects.html.
[37] EBRD (2024), URGF Ukraine war risk insurance, https://www.ebrd.com/home/work-with-us/projects/psd/54849.html.
[38] European Bank for Reconstruction and Development (2025), First Ukrainian companies take advantage of new war risk insurance facility supported by EBRD, https://www.ebrd.com/home/news-and-events/news/2025/first-ukrainian-companies-take-advantage-of-new-war-risk-insuran.html.
[35] European Commission (2025), Factsheet on the Ukraine Investment Framework, https://enlargement.ec.europa.eu/funding-technical-assistance/ukraine-facility_en#implementation-and-monitoring-measures.
[34] European Commission (2025), Ukraine Investment Framework, https://enlargement.ec.europa.eu/european-neighbourhood-policy/countries-region/ukraine/ukraine-investment-framework_en#first-investment-agreements-signed-at-ukraine-recovery-conference-2024 (accessed on July 2025).
[33] European Commission (2024), Ukraine Facility, https://enlargement.ec.europa.eu/funding-and-technical-assistance/ukraine-facility_en (accessed on March 2025).
[32] G7 Canadian Presidency (2025), G7 Finance Ministers and Central Bank Governors Communiqué May 2025, https://cdn-ca.aglty.io/ea689367/Attachments/NewItems/pdf/finmm_statement_en.pdf.
[17] Government of Ukraine (2024), Plan for the Implementation of the Ukraine Facility 2024-2027, https://www.ukrainefacility.me.gov.ua/en/#:~:text=The%20Ukraine%20Facility%20is%20the,the%20implementation%20of%20the%20program.
[25] IFC (2024), Project Information and Data Portal - GNG Wind Volyn, https://disclosures.ifc.org/project-detail/SII/48387/fcs-re-gng-wind-volyn.
[12] International Monetary Fund (2024), Fourth Review of the Extended Arrangement under the Extended Fund Facility, https://www.imf.org/-/media/Files/Publications/CR/2024/English/1ukrea2024002-print-pdf.ashx.
[18] International Monetary Fund (2024), Third Review of the Extended Arrangement under the Extended Fund Facility, https://www.imf.org/-/media/Files/Publications/CR/2024/English/1UKREA2024001.ashx.
[27] McGill and Partners, FortuneGuard, ARX (2025), Ukraine War Risk Insurance Facility, https://chamber.ua/wp-content/uploads/2025/01/Ukraine-War-Risk-Insurance-Facility.pdf.
[21] MIGA (2024), MIGA’s Ukraine Response, https://www.miga.org/migas-ukraine-response (accessed on November 2024).
[5] Ministry of Economy of Ukraine & Kyiv School of Economics (2024), Ukraine Investment Guide, https://cdn.prod.website-files.com/621f88db25fbf24758792dd8/66673120c02fe81b61d75096_Ukraine%20Investment%20Guide%202024%20(2)_compressed.pdf.
[8] Ministry of Finance of Ukraine (2026), , https://mof.gov.ua/en/derzhavnij-borg-ta-garantovanij-derzhavju-borg.
[7] Ministry of Finance of Ukraine (2025), List of priority public investment projects in the State Budget of Ukraine for 2025, https://mof.gov.ua/storage/files/List%20of%20priority%20public%20investment%20projects%20in%20the%20State%20Budget%20of%20Ukraine%20for%202025%20(non-official%20translation)(1).xlsx.
[6] Ministry of Finance of Ukraine (2024), Parliament adopted State Budget 2025, https://mof.gov.ua/en/news/verkhovna_rada_ukraini_priiniala_derzhbiudzhet_na_2025_rik_oboronu_kraini_bude_zabezpecheno-4897.
[30] Multilateral Investment Guarantee Agency (2024), MIGA Expands Insurance Support to Ukraine, https://www.miga.org/press-release/miga-expands-insurance-support-ukraine.
[31] Multilateral Investment Guarantee Agency (2023), Support for Ukraine’s Reconstruction and Economy Trust Fund (SURE TF), https://www.miga.org/support-ukraines-reconstruction-and-economy-trust-fund-sure-tf.
[14] National Bank of Ukraine (2025), Banking Sector Review - February 2025, https://bank.gov.ua/admin_uploads/article/Banking_Sector_Review_2025-02_eng.pdf?v=12.
[16] National Bank of Ukraine (2025), NBU Eases Multiple FX Restrictions to Support Economy and Tightens Some Regulations to Prevent Unproductive Capital Outflows, https://bank.gov.ua/en/news/all/natsionalniy-bank-pomyakshuye-nizku-valyutnih-obmejen-dlya-pidtrimannya-ekonomiki-ta-vodnochas-posilyuye-okremi-normi-dlya-protidiyi-neproduktivnomu-vidplivu-kapitalu.
[13] National Bank of Ukraine (2024), Financial Stability Report June 2024, https://bank.gov.ua/admin_uploads/article/FSR_2024-H1_eng.pdf?v=7.
[11] National Bank of Ukraine (2024), The National Bank is updating the legal framework to ensure direct access of foreign investors to the instruments of reconstruction of Ukraine, https://bank.gov.ua/ua/news/all/natsionalniy-bank-onovlyuye-normativno-pravovu-bazu-dlya-zabezpechennya-pryamogo-dostupu-inozemnih-investoriv-do-instrumentiv-vidbudovi-ukrayini (accessed on December 2024).
[19] NSSMC (2023), Concept for introducing a legislative framework for covered bonds and securitization in Ukraine, https://zakon.rada.gov.ua/rada/show/v0139863-23#Text.
[9] OECD (2026), Stronger Financial Markets and Institutions for Ukraine’s Recovery, OECD Publishing, Paris, https://www.oecd.org/en/publications/stronger-financial-markets-and-institutions-for-ukraine-s-recovery_0c41c8ac-en/full-report/ukraine-s-corporate-governance-framework_0d6ad33b.html.
[10] OECD (2025), Economic Survey of Ukraine, OECD Publishing, Paris, https://www.oecd.org/en/publications/oecd-economic-surveys-ukraine-2025_940cee85-en.html.
[22] OECD (2025), G20/OECD Report on blended finance derisking measures, OECD Publishing, Paris, https://www.oecd.org/en/publications/g20-oecd-report-on-blended-finance-derisking-measures_9df5fe74-en.html.
[26] OECD (2020), G20/OECD Report on the Collaboration with Institutional Investors and Asset Managers on Infrastructure, OECD Publishing, Paris, https://web-archive.oecd.org/pdfViewer?path=/2020-07-24/560068-Collaboration-with-Institutional-Investors-and-Asset-Managers-on-Infrastructure.pdf.
[20] OECD (2015), Infrastructure Financing Instruments and Incentives, https://c40.my.salesforce.com/sfc/p/#36000001Enhz/a/1Q000000MfEM/sRCHSACfaQlPWYcVmdu9_77NGXaicf1GDemsHXUUse0.
[3] Schwartz, J. (2014), Closing the Infrastructure Finance Gap: Addressing Risk, https://www.rba.gov.au/publications/confs/2014/pdf/schwartz-ruiz-nunez-chelsky.pdf.
[28] UkraineInvest (2025), New war risk insurance programme launched for investors in Ukraine, https://ukraineinvest.gov.ua/en/news/new-war-risk-insurance-programme-launched-for-investors-in-ukraine/.
[2] World Bank, Government of Ukraine, European Union, United Nations (2026), Fifth Rapid Damage and Needs Assessment (RDNA 5). February 2022-December 2025, https://documents1.worldbank.org/curated/en/099022026094036395/pdf/P514499-22f93f3a-4278-42bc-b907-db9553d12069.pdf.